Murphy highlights key omissions from 30-day report

Former Central Coast Council CEO, Gary Murphy

In an exclusive interview with Central Coast Newspapers, Murphy said there were a number of omissions from the Administrator’s 30-day report into the Council’s financial crisis and outlined three of them.

The first omission, he said, was historical findings.

“Given that the Administrator states that there was a ‘catastrophic error’ made at the time of  merger where the Council failed to recognise that it only had $5M of unrestricted cash available at the time, I believe that an enquiry into the actions of the two former councils leading up to the merger should be conducted,” Murphy said.

“We now also know that there were also several misstatements in three audited financial statements.”

Murphy said these were: Audited financial statements in 16/17 had a $38M error; Audited financial statements in 17/18 had a $89M error; and Audited financial statements in 18/19 had a $129M error.

Murphy said the report reflected a lack of procedural fairness and natural justice.

“I was not afforded the opportunity to give any submissions before the draft report was finalised and to share the insights from the work I instituted to identify the issues and to present the plan developed for corrective actions,” he said.

The third omission, Murphy said, was a root cause analysis.

“I’m not aware that a root cause analysis has been done,” he said.

“No fault tree, no process mapping and the forensic audit has not been completed to my knowledge.

“I think we need to go back to the financial statements of the two former councils and critically analyse them through the lens of what we now know.

“What we still don’t know is why and how this happened.

“Like any crisis, it is important to understand what went wrong, how this happened, what are the lessons to be learnt from this and how do we prevent this from happening again.

“I believe that the Administrator’s report is a missed opportunity to do this and I have written to the Minister for Local Government requesting that a comprehensive independent inquiry be carried out from the time of merger to the time the Administrator was appointed.

“There are a number of parties in this story; the councils before merger; the Administrator and senior staff at the time of merger; the councillors and senior staff that followed; and Council’s Audit Risk and Improvement Committee and Council’s Auditors.”

Merilyn Vale